chapter 24, section 2
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Chapter 24, Section 2. Business Fever. In the 1920’s factories poured out new goods Refrigerators Other electric appliances New low priced cars Output and consumer spending rose so the economy boomed. A Booming Economy. Coolidge prosperity: name given for these economic good times - PowerPoint PPT PresentationTRANSCRIPT
Business Fever
Chapter 24, Section 2
In the 1920’s factories poured out new goodsRefrigeratorsOther electric appliancesNew low priced cars
Output and consumer spending rose so the economy boomed
A Booming Economy
Coolidge prosperity: name given for these economic good times
Most Americans incomes rosePeople bought more goodsThis fueled future growth
World War I had helped the economyEuropeans ordered supplies from U.S. factories
U.S. government spent millions on equipment for American soldiers
During the war millions of people moved from rural areas to the cities
More than half a million African Americans moved from the South to the North to work in cities
A Booming Economy2 million soldiers came home when the war ended looking for jobs
Factories stopped turning out war materialsResult was a recession
1923-1929 economy grewFactories switched to producing consumer goods
The Auto Industry Fuels Growth
Auto boom spurred growth in related fields
Steel and rubber
Affordable cars
Car prices droppedOrdinary Americans could afford to buy a car
Henry Ford: assemble line wanted to make the cars identicalCut assembly time
1927 General Motors passed Ford as the top auto makerSold variety of models and colors
A ripple effectCar sales spurred growth in other parts of the
economyCreated jobs in :
Steel millsPaintGlassOilGasoline refineries
States and town paved roads and built highwaysGas stations, tourist cabins, and restaurantsCars changes the way Americans especially
younger Americans behaved
New goods for Sale
Cars, electric refrigerators, radios, phonographs, vacuum cleaners, and many other appliances including the telephone
Buy now pay later
Installment buying: buying on creditAmericans could buy things they couldn’t afford
Increased the demand for goods
Consumer debt jumped
Advertising
Encouraged people to think they would be happy if they bought products
Stocks Surge
Economic boom caused a stock market boom
1920’s more people invested in the stock market than ever before
Stories of ordinary people becoming rich drew others into the stock market
Stocks Surge
Bull market: name given to the soaring market
On margin: similar to installment buying, buy stock with just 10% down
1928-1929 stocks rose higher than the value of the companies themselvesUnhealthy sign